Swiss spies knew about Crypto AG compromise – and kept it from govt overseers for nearly 30 years

Swiss politicians only found out last year that cipher machine company Crypto AG was (quite literally) owned by the US and Germany during the Cold War, a striking report from its parliament has revealed.

The company, which supplied high-grade encryption machines to governments and corporations around the world, was in fact owned by the US civilian foreign intelligence service the CIA and Germany’s BND spy agency during the Cold War, as we reported earlier this year.

Although Swiss spies themselves knew that Crypto AG’s products were being intentionally weakened so the West could read messages passing over them, they didn’t tell governmental overseers until last year – barely one year after the operation ended.

So stated the Swiss federal parliament in a report published yesterday afternoon, which has caused fresh raising of eyebrows over the scandal. While infosec greybeard Bruce Schneier told El Reg last year: “I thought we knew this for decades,” referring to age-old (but accurate, though officially denied) news reports of the compromise, this year’s revelations have been the first official admissions that not only was this going on, but that it was deliberately hidden from overseers.

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The revelations that the Swiss state itself knew about Crypto AG’s operations may prove to be a diplomatic embarrassment; aside from secrecy and chocolate, Switzerland’s other big selling point on the international stage is that it is very publicly and deliberately neutral. Secretly cooperating with Western spies during the Cold War and beyond, and enabling spying on state-level customers, is likely to harm that reputation.

Professor Woodward concluded: “If nothing else this whole episode shows that it’s easier to interfere with equipment handling encryption than to try to tackle the encryption head on. But, it has a warning for those who would seek to give a golden key, weaken encryption or provide some other means for government agencies to read encrypted messages. Just like you can’t be a little bit pregnant, if the crypto is weakened then you have to assume your communications are no longer secure.”

Source: Swiss spies knew about Crypto AG compromise – and kept it from govt overseers for nearly 30 years • The Register